How Cambridge-based Seamless Capital became £100million-valued company
Seamless Capital, an algorithmic trading firm, takes us behind-the-scenes.
Twenty years ago, trading was a human’s job – sweaty traders yelled out orders on the floor of the London Stock Exchange, as was popularised in the film Wolf of Wall Street.
Since then, mathematicians and scientists, armed with doctorates and powerful computers, have all but replaced the manual traders. These days, most of the trading in London is taking place in rooms full of computers, executing so-called ‘trading algorithms’, which can place bets in fractions of a second.
A team of scientists from the University of Cambridge, under the name of Seamless Capital, are now successfully applying their research skills to beat the established players in London.
Computer-trading firms have always been very secretive: the scientists want to keep their secrets from others in order to keep their ‘edge’. The Cambridge Independent was given an exclusive peek at the people behind the black-box trading computers.
William Beauchamp, who founded Cambridge-based Seamless Capital, made over £100,000 playing poker before attending the University of Cambridge to study economics. Seamless, which is currently estimated to be worth £100million, began as a side project with a friend.
He says: “The most important thing is to hire the right people. Nobody at Seamless has a finance background – we only hire mathematicians and scientists, and have a large group of astrophysicists from Cambridge in the company.”
The firm also recently recruited David Vamplew, a world famous maths student turned professional poker player.
This provides an unusual culture, but is it also the secret to success?
The scientists at Seamless credit their success to their unorthodox ‘principles’.
“We call it radical transparency,” says William, who was inspired by billionaire American trader, Ray Dalio. “The idea is that by giving each other brutally honest feedback, everyone will learn from their mistakes faster.
“Many people don’t like this directness; it isn’t for the faint-hearted, but it’s what keeps standards high. Making mistakes is fine, but what isn’t OK is not to learn from them.”
Firms such as Seamless Capital hire some of the brightest minds in academia. One of their employees was a researcher in the mathematics department at Cambridge University, studying galaxies, gravity, and outer space, before he joined the company.
All this can seem like a bit of a waste of talent – perhaps the country would be better off if its best and brightest didn’t spend their days thinking about trading and money. Surely there are more important problems to solve for a Cambridge-educated scientist?
“It’s certainly true that our work doesn’t make the world a better place,” said William.
“The way we think about it is that first we should try to become competent and better ourselves, and once we’ve achieved some success in that we can start to help others around us.
“We try to do this by understanding what makes people virtuous, we study the Bible together on Wednesdays and have ancient philosophy books at hand in the office to help us understand these things better.”
The company recently sponsored a local cricket club: the sponsorship will provide a shirt for free to all the children in the club’s large junior section.
Perhaps it’s best to have shy mathematicians making money in the markets than high-testosterone, old school bankers and financiers?
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